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Aersale, Inc. v. Evergreen International Airlines, Inc.

Supreme Court, New York County

December 20, 2013

AERSALE, INC.,
v.
EVERGREEN INTERNATIONAL AIRLINES, INC., Defendant Index No. 100742/2013

Unpublished Opinion

For Plaintiff Patrick J. Sweeney Esq. Holland & Knight, LLP.

For Defendant Christopher R. Gette Esq. COUNTY CLERK'S OFFICE Skadden, Arps, Slate, Meagher & Flom, LLP

DECISION AND ORDER

LUCY BILLINGS, J.

On May 16, 2013, plaintiff entered a judgment by confession against defendant for $289, 634.35, plus interest at $71.42 per day commencing May 17, 2013, which arose from defendant's default under a lease for an aircraft jet engine. On May 17, 2013, plaintiff served a restraining notice and an information subpoena on defendant pursuant to C.P.L.R. §§ 5222(b) and 5224(a)(3), to enforce the judgment.

On May 21, 2013, at 3:34 p.m., plaintiff's General Counsel emailed to defendant's Chief Financial Officer (CFO), advising of the amounts of the judgment and daily interest and of the restraining notice's prohibition against transfer of defendant's assets until the judgment and interest were paid. Plaintiff's General Counsel warned that, if defendant violated the restraint, plaintiff would seek contempt penalties against defendant and its personnel and demanded that defendant take the necessary steps to avoid a violation.

On May 22, 2013, at 8:39 a.m., plaintiff's General Counsel emailed to defendant's CFO again, this time demanding that defendant return the leased engine to plaintiff pursuant to an Amended Order and Injunction on Consent entered April 17, 2013, in a prior action by plaintiff against defendant in this court under Index No. 654579/2012. This Order required defendant to return the engine within three days after the defaults on which the judgment entered May 16, 2013, was premised. The email therefore referred to and reminded defendant of those defaults: the defaults that amounted to the $289, 409.35 judgment before the addition of $225.00 in costs.

Later on May 22, 2013, before any intervening communications between the parties, defendant responded to the two emails from plaintiff's General Counsel as well as its preceding restraining notice. First, defendant's CFO responded by email to plaintiff's General Counsel that "we are wiring the 290k to you today." Opp'n Aff. of Michael Hendrickson Ex. 10. Second, defendant wired $290, 062.17 to plaintiff: the judgment of $289, 634.35, plus daily interest of $71.42 through May 22, 2013.

On the same date, at 1:25 p.m., defendant's attorney emailed plaintiff's attorney that defendant had paid the full amount due pursuant to the judgment entered in this court by plaintiff May 16, 2013, and that therefore defendant considered the restraining notice no longer in effect. The parties agree that plaintiff received this communication approximately 90 minutes after plaintiff received defendant's payment.

Plaintiff, however, did not apply defendant's payment to the debt on which the judgment was premised, but applied the payment to other debts plaintiff claimed were owed to it by defendant. Consequently, defendant now moves to vacate the restraining notice and accompanying information subpoena on the ground that defendant has satisfied the judgment that the restraining notice and subpoena were to enforce. C.P.L.R. § 5240.

I- BACKGROUND TO THE JUDGMENT BY CONFESSION

The judgment by confession was the product of the parties' second Settlement Agreement dated March 28, 2013, which included Amendment No. 2 to the lease and was intended to cure defendant's default under a first Settlement Agreement with Amendment No. 1 to the lease and to satisfy defendant's rental and use fees owed under the lease. The parties stipulate to all these documents' authenticity and admissibility.

The second Settlement Agreement required payments by defendant to plaintiff of $100, 000.00 on each of the dates March 15, April 1, and April 15, 2013, and $189, 409.35 on April 30, 2013: a total of $489, 409.35. After deduction of defendant's payment due March 15, 2013, which defendant made, it confessed a judgment of $389, 409.35. Then, on April 6, 2013, defendant paid the ?100, 000.00 installment due April 1, 2013. When defendant failed to pay the final two installments of another $100, 000.00 due April 14 and $189, 409.35 due April 30, 2013, plaintiff entered the judgment by confession, reduced by defendant's $100, 000.00 payment earlier in April.

The second Settlement Agreement also obligated defendant to pay its April 2 013 rent and use fees "plus any other sums due and owing under the Lease" by April 30, 2 013. Hendrickson Opp'n Aff. Ex. 6, at 2. As of May 22, 2 013, defendant had defaulted in these obligations as well. They were among the debts to ...


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